Rupee firmer; pressure eases after Ravi K comment

Thursday, 25 June 2015 00:00 -     - {{hitsCtrl.values.hits}}

(Reuters) - The rupee ended slightly firmer on Wednesday as a state-run bank sold dollars at 133.80, dealers said, a day after the finance minister said the currency would rise sharply in the next two weeks.

Ravi Karunanayake said on Tuesday the spot would climb to a two-year high of 130 per dollar from current levels due to ample dollar inflows.

Currency dealers however said it was unlikely the rupee would appreciate so much within such a short period.

The spot rupee ended firmer at 133.80 to a dollar on Wednesday compared with Tuesday’s close of 133.90.

Three-month forwards ended firmer at 135.40/50 per dollar compared with Tuesday’s close of 135.60.

“There were some exporter conversions,” said a currency dealer asking not to be named. “Importers were reluctant to convert as they expect the rupee to come down further.”

Dealers said the state-owned bank, through which the Central Bank usually directs the foreign exchange market, sold dollars at 133.80. The bank offered dollars at 133.90 on Tuesday.

The Government has called on banks and investment houses to propose terms for a foreign currency term financing facility as it seeks to raise up to $ 500 million to meet the costs of some externally-funded projects stated in its 2015 budget.

The rupee has appreciated around 0.3% after hitting a record low of 134.20 on Thursday.